Big Blue was later than rivals Dell, Compaq and Hewlett-Packard in deciding
to start selling these special-purpose servers. But what IBM lacked in
timeliness it's making up in breadth, with a collection of models soon to be
released within the company's Netfinity line of Intel-based servers.

The company will release a number of servers set up for specific jobs--serving
up Web pages, speeding up Internet data transfer, storing information and
establishing "firewalls" to protect networks against intruders. "We have a
complete family that covers a broader range of the appliance market than any
single vendor," said Jim Gargan, director of Netfinity marketing.

Hardware makers are scrambling to improve their server appliance offerings,
even though analysts expect the new server category to cannibalize sales of general-purpose
servers. In a report issued this week, International Data Corp. predicted
the server appliance market would reach $11 billion in 2004, up from $1
billion last year.

While server appliances are newer to the market than their general-purpose
brethren, the competition is no less fierce, particularly with Dell's new PowerApp servers. HP on Tuesday
introduced two new storage server appliances that will compete directly with
the storage server appliances coming later from IBM. Quantum and Maxtor have
their own lower-end models. Dell
and Compaq sell "caching" servers to speed up Internet data transfer by
stashing information closer to the users who need it. Even companies not
well known for servers, such as Micron and Gateway, are getting into server
appliances.

IBM's server appliances will use operating systems from Microsoft and Novell
as well as Linux, Gargan said. One model, a two-processor machine code-named
"Pinehurst," will use Windows and IBM Web server accelerator software that
Gargan says speeds Web page delivery by a factor of 2.5.

While analysts agree that appliances are a hot market, they worry and
competitors predict that the addition of yet another line of servers will
increase the confusion about which of IBM's many models is most appropriate.
IBM also sells server appliances from its RS/6000 Unix server line, for
example, and it's difficult for IBM to match all its business units with the
wide span of markets.

"There has been a lack of coordination and some challenge because certain
business units cannot creep that low or that high," said Piper Jaffray analyst Amir Ahari. "That's one
of their real challenges, to come out with a concerted product in a business
unit that could meet the needs of every segment IBM enters."

But IBM is working hard to increase the power of its Netfinity line outside
the server appliance category.

On April 18, the company will introduce the new Netfinity 4500, a
rack-mountable two-processor machine with a number of hardware and software
features to minimize the server's downtime, said Tom Bradicich, director of
the Netfinity architecture.

The 4500, code-named "Assault," uses 733-MHz Pentium IIIs and a popular chip
set from ServerWorks that
offers several high-end features.

The Assault server offers several technologies IBM has introduced to reduce
the number of times a server has to be restarted, Bradicich said. Its fans,
power supplies and disk drives can be pulled out and replaced without
shutting the computer down, a feature also offered by IBM's major competitors. IBM's servers, though, also offer the ability to swap out or add new
cards such as network adapters without having to shut the machine off. The
new 4500 also offers "chipkill" technology, which enables a server to run
even when memory modules go bad, allowing administrators to replace the
faulty parts when it's more convenient.

IBM, a major backer of Linux,
has been working to improve Linux so it can take advantage of these
high-availability features, Bradicich said.

There are more high-end features in the pipeline. Part of IBM's "X
Architecture" plans to make often anemic Intel computers perform more like
higher-end servers, Bradicich said. Software that regularly reboots Windows
servers will be upgraded in the fourth quarter of this year so it instead
can decide intelligently when to reboot.

Though he acknowledged that regular rebooting isn't a particularly
sophisticated way to fix software problems that afflict Windows when
combined with innumerable software packages, the method is undeniably a
practical solution.

And in the third quarter, IBM hopes to release software to make it easier
for administrators to monitor computers. This software, called the "common
diagnostic model," puts performance monitoring features in the special
software that controls devices such as disk drives instead of in the
operating system. That method means far less trouble for administrators, who
typically have to write or track down such monitoring software when they get
new hardware, he said.